Article

How a Perfect Storm in App Stores, Mobile, and Cloud is Transforming Enterprise Commerce

by Dan Maloney | SAPinsider

October 1, 2012

Right now, we are seeing a huge proliferation of mobile devices, both in consumer and enterprise markets. Growing familiarity with mobile capabilities has led employees to expect a consumer-like experience when performing basic business processes, like procuring enterprise software. In this article you’ll learn how the SAP Store is evolving to make the corporate-buying process more like the consumer app market to meet this demand.

The last decade has seen a perfect storm of technology trends converging to transform the way consumers and companies find, buy, and deploy software. On the leading edge of this storm is the proliferation of mobile devices, both in the consumer and in the enterprise markets. According to comScore, in mid-2012, more than 234 million Americans age 13 and older were using mobile devices.1 Mobile analytics provider Flurry says that smart device adoption is exploding worldwide faster than any technology in history, with 640 million Android and iOS devices active in July 2012.2

As a result of this mobile explosion, people are accustomed to a simple process for procuring software. A quick visit to an app store and a few taps on a screen let users download and install new apps to their mobile devices in seconds. Increasingly, corporate software buyers expect this consumer-like experience when procuring enterprise software, and have grown to anticipate an interface that mirrors the app store or app exchange models of the mobile world, but with an inherent and integrated understanding of the corporate-buying process.

But mobility is only one wave of the perfect storm driving a cultural shift in enterprise IT procurement. As cloud computing continues to permeate enterprises large and small, in many cases it is shifting the software-buying decision directly to lines of business, decreasing the dependency on IT as the only technology buying center. Today, a line of business can access the software it needs locally via the cloud. At the same time, software buyers are more nimble, leveraging social channels and the power of the internet in their search for the right solutions and relying more on peer recommendations and reputation-based information to make decisions than on traditional vendor-based pitches. As a result of these trends, software is researched, purchased, and deployed more easily and quickly than ever before, putting more power in the hands of the individual software buyer.

In short, the software-buying process is being redefined. Mobile, cloud, and social technology are all combining to change the way software is accessed. And SAP is working to provide our customers with the choice, flexibility, and self-service capabilities they expect from solutions from SAP, as well as those from the broader SAP ecosystem. While enterprise buyers want a consumer-like experience, the average corporate customer often has distinct requirements. Corporate customers need certified apps, compatibility checks, support for corporate quotes or volume discounts, and the highest security and data integrity.

While we are creating a consumer-grade buying experience with the SAP Store, the end goal is to make it easier for customers to find, evaluate, purchase, and deploy business applications. That means factoring in the nuances of the corporate procurement process by, for instance, reflecting negotiated rates for specific customers and providing quotes for corporate purchases, which a consumer app store typically does not offer.

A Store for the Enterprise Buyer

The SAP Store is designed specifically for the enterprise buyer and the corporate-buying process. While we are creating a consumer-grade buying experience, the end goal is to make it easy to find, evaluate, purchase, and deploy business solutions — whether for mobile, cloud, analytics, big data, or database technology. That means factoring in the nuances of the corporate procurement process by, for instance, reflecting negotiated rates for specific customers and providing quotes for corporate purchases, which a consumer app store typically does not offer.

In fact, when it comes to online channels, SAP has been ahead of the curve for years. In 2008, SAP launched SAP EcoHub — an online marketplace for solutions from SAP and its partners that started out with just 10 solutions and has grown to more than 1,100 solutions from over 550 partners. SAP officially introduced the SAP Store in 2011, offering cloud and mobile applications for enterprise customers.

SAP is now bringing all of our online buying channels together in the SAP Store as part of a seamless user experience, and will continue to add apps, solutions, content, and services for all of SAP’s market categories from both SAP and our partners. All the while, we are continually working to enhance our e-commerce capabilities to provide users with a more attractive and more seamless buying experience from the SAP Store.

Stocking the Shelves of the SAP Store

SAP has very high expectations for the growth of partner-developed apps in the SAP Store. Within three years, we expect that over 80% of the mobile apps offered to SAP customers will come from our ecosystem.

To achieve that level of growth, SAP needs to provide our partners with the knowledge and solutions necessary to make it as quick and easy as possible for them to develop packaged mobile apps on our platform. To remove barriers for mobile developers within our partner companies, SAP is:

Streamlining the distribution of cost-effective developer licenses

Connecting partners with other developers within the SAP ecosystem

Providing the technical enablement and education required to develop on the SAP mobile platform

Offering insight into what SAP customers need to meet their business requirements

To bring new and innovative partners into the SAP ecosystem, especially in the mobility area, we rolled out the SAP Mobile Apps Partner Program in mid-2012. Partners can enroll in this program and receive access to a broad set of benefits, depending on their enrollment level. Those benefits include cost-effective starter packages for development licenses and trial access to a cloud-based sandbox environment. The program also provides access to SAP’s community of developers for collaboration, SAP certification and packaging of mobile apps, and the ability to market and sell mobile apps via the SAP Store.

The program is open to all SAP partners, including independent software vendors, SAP resellers, and implementation and services partners. Even SAP customers interested in developing apps on SAP platforms are welcome to enroll. To learn more about the SAP Mobile Apps Partner Program, visit www.sapmobileappspartnercenter.com.

The Place for Partners

The SAP Store is the place for customers and partners to connect, as customers can browse all of the latest SAP and partner-developed applications. This more direct market access encourages partners to work with SAP and provide our customers with more options from a trusted source.

One of the first areas in which SAP partners are building a number of new apps is enterprise mobility. Mobile apps are the most natural fit for an app store and, because the SAP mobile platform lets partners develop apps easily, the number of available apps is expanding quickly.

Offering the SAP mobile platform to partners allows them to develop custom, even niche, apps that make using the SAP back-end system easier and more fun for customers. SAP will continue to develop mobile apps in key areas — think of them as showcase apps — for the most complex use cases, but we will rely on partners using our mobile platform to exponentially expand the variety of solutions available to SAP customers.

A Glimpse of What’s Ahead

As the SAP Store becomes the primary e-commerce platform for SAP customers, it will provide us with more insight to better serve our customers. Through affinity models, we can make recommendations to customers about which solutions are relevant to their industry or line of business and what they may wish to buy next. This will be enabled through our recommendation engine, which is similar to Amazon’s for the consumer market. We will also provide our customers with a comprehensive transactional and analytical console, so they can have access to the most up-to-date and relevant information during the buying process. New features will be added for our partners, so they’ll have the tools and resources they need to drive everything from setting up their storefronts to facilitating their merchandising strategies and engaging with their customers online.

The SAP Store as it’s known now is only the first step in making solutions more easily accessible to our customers. As we continue to gain deeper insight into how and what our customers prefer to buy, we will make more enhancements and provide new, streamlined ways for customers to access our solutions. As social commerce grows, the e-commerce model is transitioning from vendor-based selling to reputation-based buying. In the future, the SAP Store will let users provide rankings so their peers can make purchases based on reputation.

SAP will continue to establish itself as the enterprise software provider that is the easiest for customers to work with. For example, we will soon offer company app stores for SAP customers. These are customized stores, built on the SAP Store platform, that will host approved apps — mobile or otherwise — for a specific company. Buyers at that company will be able to browse and download the apps they need to do their jobs without worrying about vendor selection, contracting, or security, because all of those issues are handled by the procurement department before the app is made available in the company store.

From Smartphones to Smart Products

In-product app stores and commerce is the next step in connecting SAP customers more effectively with the SAP and partner solutions they seek. The SAP Store will be built into our existing products to provide users with access to relevant add-ons and partner offerings. Imagine, for example, that you’re using SAP ERP Financials and you need to pull in some third-party compliance data from a partner. Rather than moving out of SAP ERP Financials and into the SAP Store, you will be able to browse, view, and purchase related apps directly within SAP ERP Financials to immediately get the additional functionality you need.

Further down the road, we envision embedded app stores that allow customers to bring these commerce capabilities into devices such as televisions, cars, and so on. Early discussions are already under way and you may see this functionality coming in the next several years.

For customers that continue to rely on their trusted sales reps for their larger, more complex SAP technology purchases, that option will certainly remain. In fact, in light of these new e-channels, those sales reps now have more time to focus on working closely with customers on intricate software purchases to help them meet their business goals.

As technology evolves at an ever-quickening pace, so too will the technology buying experience. SAP will continue to track customer trends such as mobile, cloud, in-memory computing, and analytics, and offer the most convenient and direct path to cutting-edge technologies for our customers.

Dan Maloney (dan.maloney@sap.com) is Global Vice President of eChannels, responsible for driving online sales for SAP via the SAP Store, as well as setting strategy and direction for the eChannels organization. In this role, Dan oversees business development and growth of the online channel or “app store” at SAP.